In the UK, since 15th January 2005, any insurance broker has needed to be authorised and regulated by the Financial Services Authority. The five year anniversary of this requirement has recently passed with very little mention.
Pre FSA, there was another body called the General Insurance Standards Council or G.I.S.C. This was optional to join and there was no real onus on a broker being a member. Most brokers where, but the GISC had no “teeth”.
Without a doubt, the FSA has been good and bad. It has increased the professionalism and financial stability (through regular checks and reporting). However, most business insurance brokers will criticise it for the vast number of rules and regulations which really do not help anyone.
If you are looking for a business insurance quote, you need to know whether your broker is directly authorised (ie they are more likely to be independent) or an appointed representative (ie indirectly authorised and more than likely no independent).
You want a broker that is free to choose, who and where they go to for a quote. Take public liability insurance as an example. For a plumber, using blow torches, as a sole trader looking for a £2,000,000 limit of indemnity. The premiums, depending on your insurer, can range from £250 to £750. Now that is a big difference. You want a broker to not only give you the best cover, but also the most competitive premium.